Coat a pot on medium heat with olive oil. When the olive oil is hot add the diced onion.
Let the onions heat for about 3 minutes, you want your onions translucent and not caramelized or browned. After 1 minute add the chopped garlic and let heat for 2 minutes more. Stir in a pinch of chili flakes and the tin of tomatoes. With a fork, break down the tomatoes into smaller chunks. Add the sugar, water and salt and pepper to taste. Add the fresh basil leaves. Let the sauce simmer on medium-low heat for 20 to 30 minutes, stirring occasionally.
Serve on pasta as is, or take it up a level with sausage, mushrooms, olives, etc. The sauce will keep in the fridge for a week, or in an airtight container in your freezer for a month.